Question 1

In equilibrium, an increase in Employment Insurance benefits

Accepted Answer

A)  decreases the unemployment rate and decreases the vacancy rate. 
B)  increases the unemployment rate and increases the vacancy rate. 
C)  decreases the unemployment rate and increases the vacancy rate. 
D)  increases the unemployment rate and decreases the vacancy rate. 
E)  increases the unemployment rate, but does not affect the vacancy rate. 
A)  decreases the unemployment rate and decreases the vacancy rate. 
B)  increases the unemployment rate and increases the vacancy rate. 
C)  decreases the unemployment rate and increases the vacancy rate. 
D)  increases the unemployment rate and decreases the vacancy rate. 
E)  increases the unemployment rate, but does not affect the vacancy rate.

Question 2

In the two-sided search model, the number of firms is

Accepted Answer

A) irrelevant. 
B) exogenous. 
C) fixed. 
D) endogenous. 
E) neither endogenous nor exogenous. 
A) irrelevant. 
B) exogenous. 
C) fixed. 
D) endogenous. 
E) neither endogenous nor exogenous.

Question 3

There has been considerable debate as to the appropriate level of Employment Insurance benefits paid out to
unemployed workers. What do models of labour market search tell us about the effects of employment
insurance benefits and their effects on the economy? Explain what conclusions we can draw concerning the
optimal generosity of the employment insurance program.

Accepted Answer

In the one-sided search model, more gene

Question 4

Which of the following best describes mismatch that can increase the unemployment rate?

Accepted Answer

A) an increase in the availability of information for firms about the skills of workers 
B) Firms move production to Mexico. 
C) a decrease in the availability of information for firms about the skills of workers 
D) Production moves from Mexico to Canada. 
E) an overall decrease in the available skills of the labour force 
A) an increase in the availability of information for firms about the skills of workers 
B) Firms move production to Mexico. 
C) a decrease in the availability of information for firms about the skills of workers 
D) Production moves from Mexico to Canada. 
E) an overall decrease in the available skills of the labour force

Question 5

In equilibrium, a decrease in matching efficiency

Accepted Answer

A) decreases the unemployment rate and vacancies are constant. 
B) increases the unemployment rate and vacancies decrease. 
C) decreases the unemployment rate and vacancies increase. 
D) increases the unemployment rate and vacancies increase. 
E) increases the unemployment rate and vacancies are constant. 
A) decreases the unemployment rate and vacancies are constant. 
B) increases the unemployment rate and vacancies decrease. 
C) decreases the unemployment rate and vacancies increase. 
D) increases the unemployment rate and vacancies increase. 
E) increases the unemployment rate and vacancies are constant.

Question 6

In the one-sided search model, the welfare of an employed worker

Accepted Answer

A) is lower than the welfare of an unemployed workers. 
B) in a concave function of the real wage. 
C) increases with employment insurance benefits. 
D) decreases with the real wage. 
E) is convex in the real wage. 
A) is lower than the welfare of an unemployed workers. 
B) in a concave function of the real wage. 
C) increases with employment insurance benefits. 
D) decreases with the real wage. 
E) is convex in the real wage.

Question 7

Government intervention influences the unemployment rate through

Accepted Answer

A) its regulations. 
B) employment insurance. 
C) its stabilization policies. 
D) its tax policies. 
E) its monetary policies. 
A) its regulations. 
B) employment insurance. 
C) its stabilization policies. 
D) its tax policies. 
E) its monetary policies.

Question 8

The matching function captures the difficulties in

Accepted Answer

A) matching homogeneous firms with heterogeneous workers. 
B) matching heterogeneous firms with heterogeneous workers. 
C) matching heterogeneous firms with homogeneous workers. 
D) matching capital with labour. 
E) matching homogeneous firms with homogeneous workers. 
A) matching homogeneous firms with heterogeneous workers. 
B) matching heterogeneous firms with heterogeneous workers. 
C) matching heterogeneous firms with homogeneous workers. 
D) matching capital with labour. 
E) matching homogeneous firms with homogeneous workers.

Question 9

In the one-sided search model, a decrease in the fraction of the unemployed receiving job offers

Accepted Answer

A) is irrelevant. 
B) reduces the welfare of the unemployed. 
C) increases the welfare of the unemployed. 
D) reduces the welfare of the employed. 
E) increases the welfare of the employed. 
A) is irrelevant. 
B) reduces the welfare of the unemployed. 
C) increases the welfare of the unemployed. 
D) reduces the welfare of the employed. 
E) increases the welfare of the employed.

Question 10

In the one-sided search model, if the employment insurance benefit goes down

Accepted Answer

A) the reservation wage goes down and long-run unemployment goes up. 
B) the reservation wage goes up and long-run unemployment goes up. 
C) the reservation wage and long-run unemployment are unchanged. 
D) the reservation wage goes down and long-run unemployment goes down. 
E) the reservation wage goes up and long-run unemployment goes down. 
A) the reservation wage goes down and long-run unemployment goes up. 
B) the reservation wage goes up and long-run unemployment goes up. 
C) the reservation wage and long-run unemployment are unchanged. 
D) the reservation wage goes down and long-run unemployment goes down. 
E) the reservation wage goes up and long-run unemployment goes down.

Question 11

In the two-sided search model, if aggregate output output increases, vacancies rise, unemployment falls, and the labour force increases, this could be caused by

Accepted Answer

A) a decrease in matching efficiency. 
B) an increase in employment insurance benefits. 
C) an increase the cost of posting a vacancy. 
D) a decline in aggregate productivity. 
E) an increase in matching efficiency. 
A) a decrease in matching efficiency. 
B) an increase in employment insurance benefits. 
C) an increase the cost of posting a vacancy. 
D) a decline in aggregate productivity. 
E) an increase in matching efficiency.

Question 12

The probability of finding a job in the two-sided search model is

Accepted Answer

A) increasing in market tightness. 
B) decreasing in the efficiency of the matching function. 
C) increasing in the ratio of consumers searching to firms. 
D) constant across all levels of market tightness. 
E) decreasing in market tightness. 
A) increasing in market tightness. 
B) decreasing in the efficiency of the matching function. 
C) increasing in the ratio of consumers searching to firms. 
D) constant across all levels of market tightness. 
E) decreasing in market tightness.

In equilibrium, an increase in Employment Insurance benefits

In the two-sided search model, the number of firms is

Which of the following best describes mismatch that can increase the unemployment rate?

In equilibrium, a decrease in matching efficiency

In the one-sided search model, the welfare of an employed worker

Government intervention influences the unemployment rate through

The matching function captures the difficulties in

In the one-sided search model, a decrease in the fraction of the unemployed receiving job offers

In the one-sided search model, if the employment insurance benefit goes down

In the two-sided search model, if aggregate output output increases, vacancies rise, unemployment falls, and the labour force increases, this could be caused by

The probability of finding a job in the two-sided search model is

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

Exam 6: Search and Unemployment

In equilibrium, an increase in Employment Insurance benefits

In the two-sided search model, the number of firms is

Which of the following best describes mismatch that can increase the unemployment rate?

In equilibrium, a decrease in matching efficiency

In the one-sided search model, the welfare of an employed worker

Government intervention influences the unemployment rate through

The matching function captures the difficulties in

In the one-sided search model, a decrease in the fraction of the unemployed receiving job offers

In the one-sided search model, if the employment insurance benefit goes down

In the two-sided search model, if aggregate output output increases, vacancies rise, unemployment falls, and the labour force increases, this could be caused by

The probability of finding a job in the two-sided search model is

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters